Sizable Medicare cuts to skilled-nursing care will not only compromise the quality of care for seniors, but also will affect other businesses that support the sector, says a group of long-term-care businesses and organizations. According to the Washington-based Community Cares Coalition, the recent rule from the CMS that would cut as much as $16 billion from skilled nursing over 10 years could reduce business activity by about $2.5 billion.
“This administrative rule will trigger instability in the long-term-care workforce that directly cares for our elderly and is employed by many small, community long-term-care businesses that serve as the backbone to local economies,” Jill Capela, CEO and founder of Orthopaedic & Neurological Rehabilitation, an Austin, Texas-based contract rehabilitation therapy company, said in a news release. The problem could worsen if Congress passes the House health reform bill, which proposes an additional $44.9 billion in cuts, the group said. Underfunding in Medicaid—because of strapped state budgets in the current economy—would be another considerable hit to this segment.
In the U.S, the long-term-care industry provides about 2 million jobs and accounts for about 1% of the gross domestic product, the Community Cares Coalition estimates.
“These cuts are being levied even though SNFs (skilled nursing facilities) operate with the smallest overall total margins amongst all healthcare providers,” said Doug Burr, vice president of finance, reimbursement and government relations for Health Care Navigator, a White Plains, N.Y.-based long-term-care provider, in the release. “The low total margins at SNFs are caused in large part by Medicaid not covering the cost of care.”
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